Subject: Major International Business Headlines Brief::: 26 October 2021

From: "Bulls n Bears" <[email-masked]>
Date: Tue, 26 Oct 2021 08:17:12 +0200

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Major International Business Headlines Brief::: 26 October 2021

 <https://www.nedbank.co.zw/> 

ü  Facebook earns $9bn despite whistleblower scandal

ü  Tesla surpasses $1 trillion valuation after Hertz order

ü  On the Beach accuses Ryanair of market abuse

ü  Co-op Bank snubbed in TSB takeover approach

ü  Facebook invests billions in metaverse efforts as ad business slows

ü  UBS plans digital banking model for the mass affluent in America

ü  Asia stocks catch Wall St cheer but China caps gains

ü  Another Chinese property developer defaults, shares drop

ü  Novartis more bullish on Cosentyx, Entresto sales as Q3 profit rises

ü  EU countries splinter ahead of crisis talks on energy price spike

ü  Amazon's Staten Island warehouse workers file petition for union election

ü  EU countries splinter ahead of crisis talks on energy price spike

ü  Hyundai Motor's Q3 profit misses estimates as chip shortage takes a toll

ü  France's Thales maintains 2021 targets as Q3 sales slip

ü  Chip shortage weighs on French auto parts supplier Faurecia's sales

 

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Facebook earns $9bn despite whistleblower scandal

Facebook has posted better-than-expected earnings for the third quarter, as
it continues to face bad press over leaked internal documents.

The social media giant made $9bn (£6.5bn) of profit in the three months to
September, up from $7.8bn last year.

However, it was hit by a new privacy update to Apple's iOS 14 operating
system, which made it harder for brands to target ads at specific users.

It comes amid fresh claims of unethical behaviour made by a former employee.

Frances Haugen has released a cache of internal documents to the press,
alleging that Facebook put profit before user safety.

Multiple media reports say the documents show Facebook routinely failed to
moderate content that promoted hate speech and sex trafficking outside of
the US.

On Monday, Facebook chief executive Mark Zuckerburg told investors on a
conference call: "What we are seeing is a coordinated effort to selectively
use leaked documents to paint a false picture of our company."

'Headwinds'

In the 12 months to 30 September, the social media giant said its monthly
user-base had grown 6% to 2.91 billion.

However, despite its strong profits, its revenue slightly undershot analyst
expectations, amid "headwinds" caused by Apple's privacy rules.

Facebook said the privacy update would also have an impact on its digital
business in the final quarter of the year, but that it expected to adjust to
the changes in time.

The firm said it would spend some $10bn on its metaverse division this year
- known as Facebook Reality Labs - which is tasked with creating augmented
and virtual reality hardware, software and content.

The world's largest social media network is under scrutiny from global
lawmakers and regulators, including from the Federal Trade Commission, which
has filed an antitrust lawsuit alleging anticompetitive practices.

The whistleblower documents, which were first reported by the Wall Street
Journal, have only intensified that pressure.

They include internal research about Instagram's effects on teen mental
health; whether Facebook's platforms stoke division; and the social media
giant's handling of the 6 January Capitol riot.

At a hearing on Monday, Ms Haugen told UK MPs that Facebook is
"unquestionably making hate worse".

She said Facebook safety teams were under-resourced, and that "Facebook has
been unwilling to accept even little slivers of profit being sacrificed for
safety".

The MPs are considering what new rules to impose on big social networks
under the planned Online Safety Bill.

Despite the allegations, shares in Facebook climbed by 1.3% in after hours
trading on Monday. The firm's stock is up by about 20% so far this year.-BBC

Tesla surpasses $1 trillion valuation after Hertz order

Tesla surpassed a market value of $1 trillion on Monday, making it the fifth
such firm to reach the milestone.

Shares in the electric carmaker climbed 12.6% after it struck a deal to sell
100,000 vehicles to the car rental firm Hertz.

Tesla has been the world's most valuable carmaker for some time, but brands
like Ford and GM make more cars.

Previously only Apple, Microsoft, Amazon and Google-owner Alphabet have
reached a $1tn valuation.

For years, Tesla struggled to ramp up production of its cars, leading some
investors to speculate it would fail.

But last year the company, led by billionaire Elon Musk, upped its game and
became profitable for the first time, prompting its shares to take off.

The deal with Hertz is the biggest-ever rental car order for electric
vehicles and seen as a further vote of confidence.

Hertz will pay $4.2bn for 100,000 Model 3s over the next 14 months, which
amounts to about a fifth of its fleet. The rental firm will also build a
network of charging stations.

Teslas have a range of about 200 miles per charge, but there is a dearth of
charging infrastructure in the US - something the Biden administration hopes
to change.

"Electric vehicles are now mainstream, and we've only just begun to see
rising global demand and interest," said Hertz interim boss Mark Fields.

Tesla has just won major bragging rights.

Only a handful of American publicly traded companies have managed to achieve
$1 trillion or more in market capitalisation and they are all technology
companies.

Think big names like Apple, Microsoft, Alphabet and Facebook. Amazon joined
this elite club in January last year, 23 years after becoming a public
company.

In comparison, it took the electric carmaker headed by Elon Musk just 11
years.

What makes Tesla's achievement all the more remarkable is that it is the
first carmaker to hit this milestone.

Tesla is now worth as much as the combined market cap of the nine largest
carmakers around the world, including automotive giants like Volkswagen and
Toyota.

Yet Tesla makes up less than 1% of global car sales.

Elon Musk and company are being rewarded for anticipating the future
direction of the industry.

While Tesla may be a car company, Wall Street treats it - and values it -
like a tech company.

Tesla produced around 500,000 cars in 2020 - far lower than the likes of
Volkswagen (9.3 million), Toyota (7.2 million) and the
Renault-Nissan-Mitsubishi Alliance (6.8 million).

However, Mr Musk has set an annual sales growth target of 50% and eventually
hopes to reach 20 million vehicles a year.

On Monday, it emerged that Tesla had withdrawn its latest update of
Autopilot, the "full self-driving" car software, after drivers complained of
problems.

Some drivers reported intermittent issues such as safety alerts sounding,
despite no danger being present.

The firm has not said when the driver assistance software will be
re-released.

In August, the US National Highway Traffic Safety Administration opened a
formal safety probe into Autopilot system, which is in 765,000 US vehicles.

The investigation comes following a series of 11 crashes involving Tesla
models and emergency vehicles since 2018.-BBC

On the Beach accuses Ryanair of market abuse

The online travel agent On the Beach has launched legal action against
Ryanair in the High Court.

It claims the budget airline has tried to prevent it from booking seats on
flights on behalf of its customers, as well as making its customers go
through costly and onerous check-in procedures.

The two sides have previously been at odds over refunds for flights
cancelled during the pandemic.

Ryanair has yet to comment on the claim.

On the Beach sells package holidays online via its websites and app. These
can include flights with Ryanair, which it says has a dominant position on
many popular short-haul holiday routes, such as from Manchester to Alicante
and Lanzarote.

However, it alleges that Ryanair is reluctant for its flights to be sold via
third parties, because it makes a considerable amount of its revenue from
selling extra services, such as hotel bookings, priority boarding and car
hire through its website.

Such revenues typically account for more than a third of Ryanair's operating
income.

Ryanair itself has previously warned customers not to make bookings through
online travel agents, on the grounds that they could be overcharged, while
the airline might be unable to obtain essential customer contract and
payment details.

It has accused online agencies of providing it with "fake email addresses
and virtual credit cards" to complete bookings.

In its claim, On the Beach describes such allegations as "disparaging and
untrue", at least where its own services are concerned.

It accepts that it does make a profit on flights sold through its own
website, but points out that it operates in a highly competitive industry
and as a result its profits are "constrained to competitive levels".

Ryanair has long had a difficult relationship with online travel agents,
which it refers to as "screenscrapers".

Although they do sell seats on Ryanair planes, it believes they offer
inflated fares and divert traffic away from its own website, depriving it of
the opportunity to earn money from selling extra services such as priority
boarding, car hire and hotel rooms.

According to On the Beach, Ryanair has deliberately tried to prevent it from
making bookings, for example by rejecting credit card numbers identified as
belonging to the agency.

It has also accused the airline of withholding refunds for cancelled flights
and making passengers who booked through third parties undergo onerous and
sometimes costly check-in and verification procedures.

It claims Ryanair has breached competition law by abusing its dominant
position on popular holiday routes. Ryanair, which has yet to file a
defence, has not commented on the claims.-BBC

Co-op Bank snubbed in TSB takeover approach

The Co-operative Bank has admitted that it has failed in an approach to buy
rival bank chain TSB.

The bank said it had sent a letter to TSB owner Banco de Sabadell
"expressing an interest" in a deal, but that no talks had resulted from it.

TSB, which has more than 500 UK branches, was bought by the Spanish bank for
£1.7bn in 2015.

Sabadell said on Saturday that its board had rejected an offer after Sky
News first reported the approach.

Reuters reported that Sabadell had replied to the Co-op saying "this is not
a transaction that we wish to explore at this moment as we have previously
expressed publicly".

In a statement released on Monday, the Co-op said that "no discussions in
relation to a potential transaction are currently taking place between the
bank and Sabadell".

This is the second time the Co-op Bank has expressed an interest in buying
TSB.

The Co-op Bank, at that time still part of the Co-op Group, made an approach
in 2013, but had to abandon the attempt after deep financial problems of its
own triggered a £1.5bn rescue by three US investors.

A combined Co-op-TSB would have created a bank with eight million customers
and about 900 branches.

That would still leave it smaller than the existing big four of Barclays,
Lloyds, HSBC and NatWest.

TSB had been part of Lloyds Banking Group until 2014 when it was spun off as
an independent bank. It was then bought by Sabadell the following year.-BBC

Facebook invests billions in metaverse efforts as ad business slows

(Reuters) - Facebook Inc (FB.O) said on Monday it will start publishing the
financial results of its augmented and virtual reality labs as a separate
unit, where it is investing billions in its ambitions to build the
"metaverse" and as it reported that its main advertising business faces
"significant uncertainty."

Facebook, which reported third-quarter profit up 17%, warned that Apple
Inc's (AAPL.O) new privacy changes would weigh on its digital business in
the current quarter. The social media company reported quarterly revenue
below market expectations, which Chief Operating Officer Sheryl Sandberg
told analysts was due to the iOS changes.

David Wehner, Facebook's chief financial officer, said the company expected
its investment in its hardware division, Facebook Reality Labs, to reduce
overall operating profit in 2021 by approximately $10 billion.

The financial commitment to this hardware-focused unit which will work on
Facebook's "metaverse" ambitions, comes as the company is swamped by
coverage of documents leaked by former Facebook employee and whistleblower
Frances Haugen which she said showed the company chose profit over user
safety. read more CEO Mark Zuckerberg started Monday's analyst call by
issuing a defense against criticisms stemming from the documents, which he
said painted a "false picture of our company."

The CEO has said Facebook in the coming years will be seen not as a social
media firm but as a company focused on the metaverse. The buzzy term refers
broadly to a shared virtual environment which can be accessed by people
using different devices. read more

Facebook, which has invested heavily in virtual reality (VR) and augmented
reality (AR), including buying companies like Oculus, this year created a
product team to work on the metaverse. This month, it said it plans to hire
10,000 employees in Europe over the next five years to work on this
initiative. read more

"This is not an investment that is going to be profitable for us any time in
the near future," Zuckerberg told analysts. "But we basically believe that
the metaverse is going to be the successor to the mobile internet."

Wehner said that starting in the fourth quarter of 2021, it would break out
Facebook Reality Labs as a separate reporting segment from Facebook's family
of apps.

Shares of the company were up about 1% in after-hours trade on Monday.
Facebook, whose shares have gained about 20% so far this year, is about $85
billion away from regaining a spot on the $1 trillion club and joining new
entrant Tesla Inc (TSLA.O).

RETOOLING

The world's largest social media network is under scrutiny from global
lawmakers and regulators, including from the Federal Trade Commission which
has filed an antitrust lawsuit alleging anticompetitive practices. read more

The whistleblower documents, first reported by the Wall Street Journal, have
intensified scrutiny of the company. They include internal research and
reports about Instagram's effects on the mental health of teens and about
whether Facebook's platforms stoke divisions, as well as its handling of
activity around the Jan. 6 Capitol riot and inconsistencies in the company's
content moderation for users around the globe. read more

For the third quarter, Facebook reported monthly active users of 2.91
billion, up 6% from a year ago but short of analysts' estimates.

On the call, executives emphasized the company's focus on attracting young
adults, including through its short video feature "Reels."

"We are retooling our teams to make serving young adults their North Star
rather than optimizing for the larger number of older people," said
Zuckerberg, a shift he said would take "years, not months, to fully
execute."

The leaked documents show Facebook's ongoing concerns about its appeal to
younger users, as rivals like TikTok have enjoyed popularity with teens.
They also show the company's difficulties in dealing with users who create
multiple accounts on its platform.

Facebook said it expects fourth-quarter revenue to be in a range of $31.5
billion to $34 billion. Analysts had forecast $34.84 billion in revenue, or
a 24.1% jump, according to IBES data from Refinitiv.

Its third-quarter revenue too faced the brunt of Apple's privacy rules that
made it harder for brands to target and measure their ads on Facebook.
Sandberg, the COO, said Facebook expects it will solve "more than half" of
the problems that led to the under-reporting by the end of this year.

"The changes to Apple privacy settings have not hurt Facebook in a major
way, at least not yet," said Haris Anwar, an analyst at Investing.com.
"Though revenue and user numbers have taken a slight hit over the past
quarter, the company’s earning power is still intact."

The company's total revenue, which primarily consists of ad sales, rose to
$29.01 billion in the third quarter from $21.47 billion a year earlier,
missing analysts' estimates of $29.57 billion. Sandberg said Facebook's
advertisers were also affected by the global supply-chain disruptions and
labor shortages, which hurt advertising demand across a range of sectors and
regions.

Facebook said it repurchased $14.37 billion in stock during the third
quarter and announced an additional $50 billion in share buybacks.

The Thomson Reuters Trust Principles.

UBS plans digital banking model for the mass affluent in America

(Reuters) - UBS (UBSG.S) wants to build a digitally scalable advice model
for affluent clients in the Americas, it said on Tuesday as it reported
third-quarter earnings. read more

As part of its new 2025 strategic vision, which Chief Executive Ralph Hamers
said would be presented in February, the bank intends to provide wealthy
clients in the Americas with a "seamless digital experience with remote
human advice", it said in presentation slides.

The Thomson Reuters Trust Principles.

Asia stocks catch Wall St cheer but China caps gains

(Reuters) - Asian stocks inched higher on Tuesday, as upbeat Wall Street
earnings lifted the broader economic outlook though fresh worries about
China's property sector hit Hong Kong and mainland markets.

Japan's benchmark Nikkei average (.N225) opened up 1.14% on Tuesday, while
Australia's S&P/ASX 200 (.AXJO) was up 0.2% at 0133GMT. MSCI's gauge of Asia
Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.23%.

Hang Seng Index (.HSI) and China's benchmark CSI300 Index (.CSI300) opened
higher but fell into negative territory, weighed by property stocks.

A large proportion of S&P 500 companies are due to report results this week,
including technology heavyweights Facebook (FB.O), Apple Inc (AAPL.O),
Amazon (AMZN.O), Microsoft (MSFT.O), and Alphabet (GOOGL.O), which have been
the drivers of the market rally this year.

"Of the S&P 500 firms that have reported this season, the net surprise on
earnings has been 13%. So it is easy to understand the optimism percolating
through risk appetite despite inflation fears," said ANZ Research in a
Tuesday note.

"The economy remains very strong. We expect the recovery will re-accelerate
once bottlenecks and COVID concerns subside," ANZ analysts said in the note.

The Dow Jones Industrials and S&P 500 closed at record highs on Monday.
Tesla, which jumped 12.66% and breached $1 trillion in market
capitalisation, also provided the biggest boost to the S&P 500 and the
Nasdaq. read more

China has said it will roll out a pilot real estate tax in some regions,
adding to existing investor concerns about real estate in the mainland. read
more

An index of Hong Kong-listed mainland property firms (.HSMPI) dropped 4%.

"The market is still going in a strong trend, particularly as it started to
digest that Fed will start tapering in November," said Edison Pun, Senior
Market Analyst at Saxo Markets.

"However, we need to watch whether it will put on extra pressure on the
Chinese property market when property tax is rolled out. It could hurt
consumption in the end if we are seeing an overall downturn on Chinese
property prices," he said.

U.S. Treasury yields were lower as uncertainty about when the Federal
Reserve would raise rates to curb rising inflation weighed on market
sentiment.

The dollar rose 0.1% on Tuesday, recovering from a near one-month trough hit
during the previous session.

Oil prices rose on Monday and reached multi-year highs, as tight global
supply and strengthening fuel demand in the United States and beyond
supported prices. read more

Brent crude futures slipped 0.03% to $85.96 a barrel, while the U.S. West
Texas Intermediate (WTI) crude futures dipped 0.04% to $83.72 a barrel in
Tuesday morning trading.

Spot gold was down 0.21% to $1,803. per ounce.

The Thomson Reuters Trust Principles.

Another Chinese property developer defaults, shares drop

(Reuters) - Modern Land (1107.HK) reported a missed payment on Tuesday, the
latest Chinese property developer to do so, adding to worries about
spiralling effects of the debt crisis at behemoth China Evergrande Group
(3333.HK) and dragging on shares in the sector.

China's state planner is set to meet with property firms carrying large
dollar-denominated debts later in the day to take stock of their total
issuance volume and repayment capability, amid the mounting concerns about
liquidity.

Evergrande, which narrowly averted a costly default last week, is reeling
under more than $300 million in liabilities and has a major payment deadline
on Friday. read more

Modern Land (China) Co Ltd said in a filing that it had not repaid principal
and interest on its 12.85% senior notes that matured on Monday due to
"unexpected liquidity issues".

This follows a default by Fantasia Holdings Group (1777.HK) on a maturing
dollar bond in early October that heightened concerns in international debt
markets, already roiled by worries over whether Evergrande would meet its
obligations.

Developers are defaulting "one by one", said an investor with exposure to
Chinese high-yield debt, who asked not to be named as he was not authorised
to speak with media.

"The question is always, who's next?"

Shares of Chinese property shares extended losses, hurt also by concerns
over plans to introduce a real estate tax. China's CSI 300 Real Estate Index
(.CSI000952) fell 2.6%, and the Hang Seng Mainland Properties Index (.HSMPI)
slumped nearly 5%.

The prospect of contagion and more defaults have weighed on the sector in a
major setback for investors.

Chinese Estates Holdings Ltd (0127.HK) said it would book a loss of
HK$288.37 million in the current financial year from its latest sale of
bonds issued by Chinese property developer Kaisa Group Holdings Ltd
(1638.HK).

Shares in China Evergrande Group's electric vehicle (EV) unit (0708.HK) rose
as much as 5.8% early on Tuesday, as the cash-strapped developer said it
would prioritise the growth of its EV business, before reversing course to
slump 3%.

China Evergrande (3333.HK) gave up early gains to fall 6%.

The Thomson Reuters Trust Principles.

Novartis more bullish on Cosentyx, Entresto sales as Q3 profit rises

(Reuters) - Novartis's (NOVN.S) third-quarter adjusted operating profit rose
10% as the Swiss drugmaker lifted its peak sales estimate for its two most
important pharmaceuticals.

Operating profit, adjusted for special items, rose 10% to $4.47 billion,
driven by higher sales of arthritis and psoriasis drug Cosentyx and heart
failure treatment Entresto.

In a statement on Tuesday, Novartis said it increased its peak sales
guidance for Cosentyx to at least $7 billion and for Entresto to at least
$5.0 billion.

The Thomson Reuters Trust Principles.

EU countries splinter ahead of crisis talks on energy price spike

(Reuters) - Divisions have deepened among European Union countries ahead of
an emergency meeting of ministers on Tuesday on their response to a spike in
energy prices, with some countries seeking a regulatory overhaul and others
firmly opposed.

European gas prices have hit record highs in autumn and remained at lofty
levels, prompting most EU countries to respond with emergency measures like
price caps and subsidies to help trim consumer energy bills.

Countries are struggling to agree, however, on a longer term plan to cushion
against fossil-fuel price swings, which Spain, France, the Czech Republic
and Greece say warrant a bigger shake-up of the way EU energy markets work.

Ministers from those countries will make the case on Tuesday for proposals
that include decoupling European electricity and gas prices, joint gas
buying among countries to create emergency reserves, and, in the case of a
few countries including Poland, delaying planned policies to address climate
change.

In an indication of differences likely to emerge at the meeting, nine
countries including Germany - Europe's biggest economy and market for
electricity - on Monday said they would not support EU electricity market
reforms.

"This will not be a remedy to mitigate the current rising energy prices
linked to fossil fuels markets," the countries said in a joint statement.

The European Commission has asked regulators to analyse the design of
Europe's electricity market, but said there was no evidence that a different
market structure would have fared better during the recent price jump.

"Any interventions on the market and the decoupling of [gas and power]
pricing are off the table," one EU diplomat said, adding there was "no
appetite" among most countries for those measures.

Other proposals - such as countries forming joint gas reserves - would also
not offer a quick fix and could take months to negotiate. A European
Commission proposal to upgrade EU gas market regulation to make it greener,
due in December, is seen as the earliest that such proposals would arrive.

With less than a week until the international COP26 climate change summit,
the energy price spike has also stoked tensions between countries over the
EU's green policies, setting up a clash as they prepare to negotiate new
proposals including higher tax rates for polluting fuels.

Hungarian prime minister Viktor Orban has dismissed such plans as "utopian
fantasy", a stance at odds with other EU countries who say the price jump
should trigger a faster switch to low-emission, locally produced renewable
energy, to help reduce exposure to imported fossil fuel prices.

The Thomson Reuters Trust Principles.

Amazon's Staten Island warehouse workers file petition for union election

(Reuters) - Workers at an Amazon.com Inc (AMZN.O) warehouse in New York
City's Staten Island borough have filed a petition to form a union, the U.S.
National Labor Relations Board (NLRB) said on Monday, though the company
questioned whether enough legitimate signatures were gathered.

The move represents the second time that U.S. staffers for the world's
biggest online retailer have aimed to unionize this year, following a failed
effort at an Alabama facility in April. Though Amazon has long resisted such
efforts, some employees are advocating for more protections and benefits in
light of a COVID-19 pandemic that put their safety at risk.

Chris Smalls, a former employee at the Staten Island warehouse, led the
organizing drive and collected around 2,000 signatures to request an
official vote through the NLRB. Smalls rose to prominence last year when
Amazon fired him, alleging he violated a paid pandemic-related quarantine
when he showed up at his facility to protest work conditions.

"This is monumental for the workers," Smalls said in an interview. "This is
proof that you can stand up, fight back and organize your workplace."

The NLRB confirmed that the union petition was filed electronically with the
board.

Amazon spokesperson Kelly Nantel said, "We're skeptical that a sufficient
number of legitimate employee signatures has been secured to warrant an
election. If there is an election, we want the voice of our employees to be
heard and look forward to it. Our focus remains on listening directly to our
employees and continuously improving on their behalf."

For the past six months, some staff at the Staten Island warehouse, called
"JFK8," and other nearby facilities have been organizing to form what they
call the Amazon Labor Union (ALU). Smalls said he set up a tent outside the
warehouse, while some current workers championed the same cause on the
inside.

These workers are demanding higher wages, job security, safer conditions,
better medical leave and more paid time off. According to Smalls, Amazon has
put out anti-union literature, and his group has responded with their own
literature.

The organizing drive is being held at Amazon's only New York City
fulfillment center, one of the company's large warehouses from which it
ships many goods.

It is not clear when an election would be held if regulators green light the
petition.

Amazon handily beat back an effort by the Retail, Wholesale and Department
Store Union (RWDSU) to organize its Bessemer, Alabama, warehouse.

Workers rejected joining the RWDSU by a more than two-to-one margin this
spring, but another vote could be held as the NLRB reviews union claims that
Amazon violated labor laws during that election.

The Thomson Reuters Trust Principles.

EU countries splinter ahead of crisis talks on energy price spike

(Reuters) - Divisions have deepened among European Union countries ahead of
an emergency meeting of ministers on Tuesday on their response to a spike in
energy prices, with some countries seeking a regulatory overhaul and others
firmly opposed.

European gas prices have hit record highs in autumn and remained at lofty
levels, prompting most EU countries to respond with emergency measures like
price caps and subsidies to help trim consumer energy bills.

Countries are struggling to agree, however, on a longer term plan to cushion
against fossil-fuel price swings, which Spain, France, the Czech Republic
and Greece say warrant a bigger shake-up of the way EU energy markets work.

Ministers from those countries will make the case on Tuesday for proposals
that include decoupling European electricity and gas prices, joint gas
buying among countries to create emergency reserves, and, in the case of a
few countries including Poland, delaying planned policies to address climate
change.

In an indication of differences likely to emerge at the meeting, nine
countries including Germany - Europe's biggest economy and market for
electricity - on Monday said they would not support EU electricity market
reforms.

"This will not be a remedy to mitigate the current rising energy prices
linked to fossil fuels markets," the countries said in a joint statement.

The European Commission has asked regulators to analyse the design of
Europe's electricity market, but said there was no evidence that a different
market structure would have fared better during the recent price jump.

"Any interventions on the market and the decoupling of [gas and power]
pricing are off the table," one EU diplomat said, adding there was "no
appetite" among most countries for those measures.

Other proposals - such as countries forming joint gas reserves - would also
not offer a quick fix and could take months to negotiate. A European
Commission proposal to upgrade EU gas market regulation to make it greener,
due in December, is seen as the earliest that such proposals would arrive.

With less than a week until the international COP26 climate change summit,
the energy price spike has also stoked tensions between countries over the
EU's green policies, setting up a clash as they prepare to negotiate new
proposals including higher tax rates for polluting fuels.

Hungarian prime minister Viktor Orban has dismissed such plans as "utopian
fantasy", a stance at odds with other EU countries who say the price jump
should trigger a faster switch to low-emission, locally produced renewable
energy, to help reduce exposure to imported fossil fuel prices.

Hyundai Motor's Q3 profit misses estimates as chip shortage takes a toll

(Reuters) - South Korea's Hyundai Motor Co (005380.KS) swung to a profit in
the third quarter but slightly missed analysts' estimates as the ongoing
global chip shortage drove down shipments of vehicles.

Hyundai, which together with affiliate Kia Corp (000270.KS) is among the
world's top 10 automakers by sales, reported a net profit of 1.3 trillion
won ($1.10 billion) for the July-September quarter. In the same period a
year earlier it posted a loss of 336 billion won when it was hit by a
one-time expense related to engine quality issues and recalls.

The profit slightly missed an average analyst forecast of 1.4 trillion won
compiled by Refinitiv SmartEstimate.

The global chip crisis, triggered partly by surging demand for laptops and
consumer electronics during the pandemic, has shuttered auto production
lines globally this year and forced automakers to slash shipment forecasts.

Hyundai previously said its on-year sales growth might slow in the second
half of 2021 due to challenging business conditions, including unstable
supplies of automotive chips.

Shares of Hyundai Motor were trading flat after the firm published its
earnings results, compared with a 0.8% rise in the broader market KOSPI
(.KS11).

($1 = 1,177.2300 won)

The Thomson Reuters Trust Principles.

France's Thales maintains 2021 targets as Q3 sales slip

(Reuters) - French defence group Thales (TCFP.PA) reaffirmed full-year
financial forecasts as it reported a 1.4% dip in underlying third-quarter
sales, dampened by comparisons with the easing of a first wave of COVID-19
lockdowns a year earlier.

The maker of radars for fighters and airport control towers, as well as
biometric identity systems, also reported a 9% pick-up in quarterly orders
on a like-for-like basis, led by its satellite business and a partial
recovery in commercial flying.

The gradual rebound in short-haul and domestic air travel helped push
Thales' Aerospace unit sales up 4% in the third quarter, while its 'Digital
Identity and Security' division also ticked higher as more people start to
travel after shunning flights during the pandemic.

"For long-haul, the recovery will take much longer," Chief Financial Officer
Pascal Bouchiat told reporters.

Overall, Thales' group sales slipped 1.4% to 3.555 billion euros ($4.1
billion) in the third quarter because of a tough basis of comparison with
the same period a year earlier, while new orders rose by an underlying 9% to
2.992 billion.

Thales said it continued to implement the sale of its GTS railway signalling
business after announcing advanced talks in August to sell it to Japan's
Hitachi (6501.T). The proposed deal values the division at 1.66 billion
euros. read more

On Tuesday, it said it expected to sign a definitive deal in the first
quarter of 2022. For now, the group's 2020 and 2021 numbers have been
adjusted to remove the outgoing unit.

Thales expects 2021 sales between 15.8 billion and 16.3 billion euros based
on its structure as of August 2021, and an operating margin of 9.8% to
10.3%, with orders topping revenues.

The Paris-based company, which owns 35% of France's state-run Naval Group
military shipyard, reiterated it did not expected a significant financial
impact from the cancellation of a contract to supply Australia with French
submarines.

Australia last month said it would scrap a $40 billion deal for Naval Group
to supply conventional submarines and would instead build at least eight
nuclear-powered subs with U.S. and British technology after striking a
trilateral security pact.

It remains unclear whether Thales could still pick up any business for the
replacement subs via its presence in the UK.

"As to what a new submarine contract would look like, and whether our
activities could be involved, that's much too early to say," Bouchiat said.

Asked about widespread concerns about growing labour shortages and
logistical bottlenecks, Bouchiat said Thales faced "a battle for talent"
alongside many other companies.

He did not see significant supply chain bottlenecks, though a shortage of
semi-conductors has cost the company some 20-30 million euros that it
expects to recoup in the fourth quarter.

($1 = 0.8593 euros)

The Thomson Reuters Trust Principles.

Chip shortage weighs on French auto parts supplier Faurecia's sales

(Reuters) - French car parts maker Faurecia (EPED.PA) posted a more than 10%
drop in third-quarter sales on Tuesday, as its customers cut production due
to a global shortage of semiconductor chips.

The group, which supplies car seats, dashboards and fuel systems to
automakers, reported sales of 3.43 billion euros ($3.99 billion), compared
to 3.82 billion euros in the same period of 2020.

"Market conditions remained tough in the past quarter, impacted by adverse
supply chain conditions, primarily semiconductors," Chief Executive Officer
Patrick Koller said in a statement.

However, Faurecia said it outperformed worldwide automotive production,
citing October forecasts from information provider IHS Markit that showed a
more than 19% decline in global output.

Car makers such as Renault (RENA.PA), Volkswagen (VOWG_p.DE) and Stellantis
(STLA.MI) - some of Faurecia's biggest customers - have cut production
targets due to the shortage, slowing demand for parts.

The supply chain issues have pulled the brakes on car makers' efforts to
recover from last year's coronavirus lockdowns and shift towards making
electric vehicles.

Faurecia confirmed its 2021 financial guidance, which it had cut in
September due to IHS Markit's forecast of a global shortfall in automotive
production. read more

Last week, IHS Markit estimated the supply chain problems would cost the
automotive industry around 11 million vehicles this year. read more

($1 = 0.8593 euros)

The Thomson Reuters Trust Principles.

 

 

 

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INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

 

 

National Unity Day

December 22

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December 25

Boxing Day

December 26

Public Holiday in lieu of Boxing Day falling on a Sunday

December 27

Companies under Cautionary

 

ART

PPC

Starafrica

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Turnall

Medtech

Zimre

Nampak Zimbabwe

 

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